Visual China.
2023 is coming to an end, looking back on this year, we have experienced a strong recovery of catering after the beginning of the year, witnessed the ** battle of the bottom line under the involution, felt the gradual fading consumption desire of consumers, and witnessed wave after wave of "store closures". Industry insiders commented, "On the one hand, there is a rapid recovery of the catering industry, and on the other hand, there is a bleak situation all over the country." ”
With the acceleration of industry reshuffle and the intensification of the "crowding out effect", how should catering brands break the situation? For the upcoming 2024, what should the restaurant industry do?
Accelerate the recovery
In the Spring Festival of 2023, the catering industry ushered in a blowout recovery. Spring Festival catering Chinese New Year's Eve dining table is hard to find, popular restaurants have more than 1,000 people, and Haidilao has received more than 6.5 million customers in 5 days.
According to data released by the National Bureau of Statistics, from January to February this year, the national catering revenue was 842.9 billion yuan, an increase of 92%, accounting for 10 percent of the total retail sales of consumer goods9%, higher than the growth rate of total retail sales of consumer goods by 57 percentage points. This shows that the recovery rate of the catering industry is faster than the recovery rate of overall consumption. According to the Red Meal Industry Research Institute, the revenue of the catering industry will increase to 4 in 20238 trillion level, reaching a record high.
On the other hand, many F&B brands are turning their attention overseas to seek a second growth curve. Since the beginning of the year, catering companies have announced that they will "go overseas" or increase their overseas markets. In January this year, Xiabu Xiabu Group announced its high-profile overseas expansion and established a Hong Kong, Macao, Taiwan and international business department, opening 1 new Xiabu Xiabu in Hong Kong, China, and 2 new Xiabu Xiabu in Taiwan and Singapore. In March this year, Nan Hot Pot's first overseas store, Seattle in North America, officially opened. In April, Zhu Guangyu Hot Pot Restaurant Global Brand Launch Conference and Overseas Market Launching Ceremony.
Jiang Han, a senior researcher at Pangu Think Tank, said that with the intensification of competition in the domestic market, companies need to open up new markets to gain more opportunities and profits, while overseas markets provide more opportunities for enterprises.
Li Liang, founding partner of Big Tree Landing Counseling Strategic Consulting, believes that the globalization of chain Chinese food brands is a big opportunity for Chinese restaurant chain enterprises in the next 10 years. On the one hand, there are 67 million Chinese in the world scattered around the world, which is equivalent to the population of developed European countries such as the United Kingdom and Germany. As one of the most important symbols of Chinese culture, Chinese food is driven by Chinese consumption, which shows its future development prospects. On the other hand, the extremely complex processing technology of Chinese food has produced the diversification of Chinese food flavor types, the diversity and inclusiveness of taste, which can adapt to the changes of catering culture of different skin colors and different regions, making Chinese food likely to become the world's largest catering category.
**The war is back
In May, the catering industry ushered in the most prosperous "May Day" in the past five years. Zibo barbecue phenomenon out of the circle, Beijing Hu Da Restaurant, Four Seasons Minfu and other restaurants have more than 1,000 tables, Wuhan's main chain shrimp restaurants and Wuhan's 83 main brand chain catering brands have sold a total of more than 300 tons of crayfish...According to data from the China Hotel Association, more than ninety percent of the surveyed catering companies reported that their operating income during the May Day holiday had recovered to the pre-epidemic level, of which more than sixty percent achieved positive growth compared with before the epidemic, with an average growth of 572%；Nearly 30% is basically the same as before the epidemic.
Tianyancha data shows that from January to June 2023, there will be 167 newly registered enterprises in the catering industryMore than 60,000, compared with the same period in 2022**234%。It can be seen that the number of new stores has skyrocketed, and the old stores have struggled, which has greatly stimulated the entire track.
In the involution of the industry, there has been a ferocious wave of price reductions in the catering industry. A relevant person in the catering industry told the Blue Whale financial reporter, "The peers are fighting the best battle, and you have to go down!" Since May, the West Young Master, Hefu Lao Noodles, Jia Guolong China Fort and other high-end fast food have put down their figures, the West Young Master Classic ** general drop of more than 10 yuan, and Fu Lao Mian in some cities launched the "10 yuan to eat Hefu Lao Noodles" lunch benefits, Jia Guolong China Fort also dropped some single items from the initial close to 30 yuan to 10 yuan. The breakfast of brands such as Nancheng Xiang, Hehegu, and Jiahe Yipin has been rolled up to the "3 yuan era".
At the same time, the catering industry's "ultra-low price**" is also in full swing. For example, Xiaolongkan's "first hot pot meal for 4 people in autumn", the original price is 470 yuan, and the price of Douyin is 320% off as long as 177 yuan; KFC "**SPA Chicken Chop Burger Zizi Yes Grilled Chicken Leg Burger OK Three-Piece Set" Douyin** price dropped by 186 yuan; The original price of the steakhouse is 268 yuan, and the price of "Selected Single Lunch**" Meituan ** is 420% off only 128 yuan. "There are too many businesses to do **, **are all cost-effective", consumer Tutu told the Blue Whale financial reporter: "I have entered a lot of **wool groups, and there are group friends to share low prices every day**."
Industry insiders believe that the "* war" is undoubtedly a danger signal for more small and medium-sized catering brands, after all, price reductions will only sacrifice the interests of stores. Therefore, the reality experienced by more restaurant owners is that there are no customers, meager profits, and the market survival space is being swallowed up. The catering industry is facing a situation where big fish eat small fish, and it is facing a reshuffle of the industry.
Jiang Han said that the rise of chain catering brands and platforms has indeed had a certain impact on the profits of restaurant companies. But this is not the only reason why restaurant companies are eliminated. The competition in the catering industry is all-round, in addition to the first, quality, service, brand and other aspects are also very important.
Discount coupons from Douyin and Meituan are not the main reason why catering companies are eliminated. Discount coupons are essentially low-priced, and they are a short-term means of development in the process of enterprise development. If this kind of tactic is understood as a way to build a brand, then the company will gradually move away from brand building. Li Liang said.
The era of low profits in catering is coming
After the excitement, the "uneven recovery" officially debuted: some people are full of money, and some people's business is halved.
In the summer, the "store opening tide" has not stopped, and the "crowding out effect" of the catering industry has intensified. As of the end of August, the total number of restaurants nationwide has exceeded 27680,000. But on the flip side, the number of restaurant cancellations reached 21 in two months90,000, as of the end of August, the cumulative number of cancellations of restaurants nationwide reached 7790,000. In other words, from January to August 2023, the catering industry will open an average of 3In the time of 5 stores, one store is closing.
Industry insiders said that because consumption is slowly recovering, catering entrepreneurship has taken the lead in breaking out. Stretching the dimension, it can be found that the contradiction between the two has been intensified since May. From May to September, the revocation of "catering" notes reached a year-on-year increase9%。
At the end of August, major listed catering companies successively disclosed semi-annual reports. According to the statistics of the Retail Research Center of Lianshang.com, in the first half of 2023, 15 of the 16 listed restaurant companies achieved a significant year-on-year increase in revenue, and only one company, Helens, experienced a year-on-year decline in revenue due to large-scale store closures. Although the revenue is red, it is still a little unsatisfactory in terms of net profit scale. According to the statistics of the Retail Research Center of Lianshang.com, in the first half of 2023, 8 of the 16 listed restaurant companies will have a net profit of less than 100 million yuan, accounting for nearly half.
Zhu Danpeng, an analyst of China's food industry, told the Blue Whale financial reporter that under the influence of omni-channel, all-round and multi-dimensional competitive factors, the entire industry has entered an era of low profits.
On the other hand, despite the recovery of the industry, the average order value of many restaurant companies has declined overall. For example, in the first half of the year, Haidilao's overall customer unit price fell to 102 yuan from 105 yuan in the same period last year9 yuan; Taier's unit value also dropped to 75 yuan from 78 yuan in the same period last year. In the third quarter, the average average order value of KFC and Pizza Hut decreased by % year-on-year, respectively. Starbucks' financial results for the fourth quarter and full year of fiscal 2023 ended October 1, 2023 showed that its average average order value decreased by 3% year-on-year.
At the same time, the F&B industry is also experiencing rising costs. The three-high problem of catering is especially prominent after the epidemic, with labor continuing to rise, rents remaining high, and the cost of ingredients doubling. Lao Xiang Chicken said in its prospectus that in recent years, commercial real estate has risen rapidly, and the rent of shops has also risen. The first grade of store rent will inevitably increase the operating costs of enterprises and franchisees, and have a negative impact on the development of the industry. In addition, because agricultural and sideline products such as rice and flour, meat and poultry, edible oil, vegetables and other factors are susceptible to natural conditions, market supply and demand, etc., there is a certain degree of volatility, which poses a challenge to the cost control and anti-risk ability of Chinese fast food enterprises. According to the Laoxiang Chicken prospectus, between 2019 and 2021, the company's direct material costs increased by 72% and labor costs increased by 54%. The same is true of the old lady. According to the prospectus, between 2019 and 2021, the company's direct material costs rose by 28% and labor costs increased by 45%.
A cold wave spreads
Approaching the end of the year, with the drop in temperature in many places across the country, the catering industry also felt the "chill".
The wave of store closures continues. Recently, "10,000 stores have been closed in three years, and Zhengxin chicken steak has been abandoned by young people" has become a hot topic and has sparked widespread discussion. The originator of Internet celebrity milk tea, "a little bit", is now disappearing little by little. Chain brands have been greatly damaged, and more self-employed restaurants have also been ruthlessly slapped to death on the beach by the wave. Under the keyword of "restaurant closed" on Douyin, Xiaohongshu, Station B, and Weibo, many netizens reluctantly bid farewell to their stores.
According to the data of enterprise checking, from January to October this year, the cumulative number of new registrations of restaurants in the country was 35010,000, 37 more than the same period last year40,000; At the same time, the cumulative sales volume of catering in the country reached 10560,000, compared to 5380 thousand.
In the secondary market, on the first trading day of November, Hong Kong catering stocks suffered **, and the share prices of Yum China and Haidilao fell by 12 respectively99% and 1287%。The reason for this is that Yum China's third-quarter report fell short of expectations. In the third quarter, Yum China's revenue and net profit growth rates were 9% and 18%, respectively, a significant decline from the first half of this year. According to the company, consumer demand began to weaken at the end of September and continued into October. This has had a big impact on Yum's two major brands, KFC and Pizza Hut.
To some extent, Yum China's slowdown is just a microcosm of the downgrade in F&B spending. After all, looking back on this year, "affordable" and "cost-effective" are indeed well-deserved keywords in the catering industry.
Zhao Zhiqiang, founder of BigPizza, said that on the consumption side, people's debts have generally increased after the epidemic, but their incomes have not kept up, resulting in a decrease in spending power. Different from the simple pursuit of low prices by consumers in the past, consumers are now more savvy, and they have high requirements for product quality while seeking low prices, and are more in pursuit of "consumption downgrading and experience upgrading". It can be expected that good products coupled with ultra-high cost performance will become the winning way in the field of mass consumption in the future.
Because China's macro economy has entered the era of discounts, China's consumption thinking has also entered the era of coexistence of quality-price ratio and cost-effectiveness. Zhu Danpeng told the Blue Whale financial reporter, "From a certain point of view, the consumption thinking and consumption behavior of the Chinese people are forcing the innovation, upgrading and iteration of the profit model of the entire industry." At present, the integrity of the entire industrial chain of the catering industry is constantly improving, including scene innovation, quality improvement, and service system upgrading, which are all important nodes in the catering industry. In addition, the improvement of quality-price ratio and cost-effectiveness will also make the industrial structure of China's catering industry continue to optimize and improve. ”
Catering enterprises need to improve their management efficiency and cost control capabilities, reduce unnecessary expenses, and improve profitability. Secondly, enterprises need to continuously improve the quality of products and services to meet the needs of consumers and enhance their competitiveness. Finally, companies need to strengthen brand building and marketing promotion, improve brand awareness and reputation, and attract more consumers to come and consume. Jiang Han added.
Whether we can seize this recovery cycle and survive the critical period of transformation may be the focus of the follow-up development of major catering companies. Like two sides of a coin, crisis and opportunity often coexist. The so-called do not break and do not stand, break and then stand. From this point of view, the catering industry is also brewing more possibilities for reversal in 2024.